IBM Sets Sights on Sun's Partners

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In the wake of Oracle’s recent acquisition of Sun Microsystems, longtime Sun rival IBM has made no secret of its plans to woo Sun's channel partners and customers. Is Big Blue the right fit?

It’s been one of the longest standing IT cross-town rivalries for decades. Innovative, irreverent, scrappy Sun Microsystems maneuvering to compete with big, formal, complex IBM, most loudly beginning back in the early '90s. A more stark contrast in cultures and marketing campaigns had never before been seen. In the wake of Oracle’s recent winning bid to acquire Sun Microsystems, you’ll find that IBM’s attention is trained less on Sun as a company and more on the customers and partners of its Silicon Valley competitor.

The technology wars have raged on publicly forever between the two companies – at the operating system, enterprise and mid-range server, middleware and storage product levels. But until now the battleground for channel partner mindshare and investment has been less visible. In an analyst call earlier this month, IBM reviewed in detail its strategy for gaining support and momentum with Sun’s customers and partners during the integration of Sun by Oracle. IBM touted wins with 250 Sun accounts just in the first half of 2009 and its migration of more than 1,800 competitive Sun installations to IBM technology over the past three years.

From a technology perspective, IBM certainly has a compelling and predictable technology story for channel partners. While application development and chipset innovations historically have not been IBM’s hallmark, what Sun partners gained in innovation they often sacrificed in program and business-process predictability. With rumors abounding about what Oracle will really do with Sun’s legacy systems business, IBM is fueling the FUD to hardware integrators about an unclear technology roadmap.

Measuring partner support, IBM execs indicated they have engaged over 200 of Sun’s channel partners and ISVs in 2009. Marketing materials say that one-third of these partners have never worked with IBM before. Over the past five years, many traditional Sun integrators have been diversifying their enterprise products portfolio beyond Sun, if for no other reason than to put a safety net under Sun’s unpredictable financial results.

From many personal conversations with Sun integrators, this diversification beyond Sun seemed to tip toward HP as much, if not more, than to IBM. Either way, the ranks of Sun’s partners who remain Sun-exclusive are fewer than ever, despite the company’s continued incentives for partners to remain 100% loyal.

When smart partners look beyond the polish of IBM marketing and recruitment materials, they’ll see some head-turning evidence of market support. Specific customer wins in key Sun verticals and 43 percent of ISVs stepping up their commitment to an IBM port are facts hard to argue with. But, it’s the undocumented, daily dynamics of doing business with IBM for the "average" solution provider and ISV that go unmentioned.

We see the scorecard of pros and cons to Sun partners teaming with IBM as follows:

PRO: Clear, predictable systems architecture and technology roadmapCON: IBM has not been known for their swift time-to-market and has notoriously inundated their channel with the breadth of their server portfolio. Predictability is only good if choices are clear and complexity is low.

PRO: Migration AssuranceCON: Thousands of packaged and customer applications were built from scratch for Solaris; that migration will take a lot of money and time. Without direct subsidization, neither partners nor customers are going to be anxious to increase their costs or risks right now.

PRO: Robust EcosystemCON: Yes, IBM has a broad and deep partner audience. But Sun partners like being one of a couple of thousand partners – not one among hundreds of thousands. Partners have been Sun-exclusive for years for a good reason – market differentiation and margins.

PRO: Industry expertiseCON: Yes, IBM has a huge set of resources to cultivate and market business-relevant solutions, including a host of partner incentive programs. But dislodging Sun/partner strongholds in Sun legacy markets such as telco, financial services, government and entertainment and media will be a long road for IBM.

PRO: Ease of doing businessCON: Sun is known for doing what it takes to win each and every deal. IBM has been known for its slow responsiveness and business complexity. We’ll see how the IBM "Radical Simplicity" initiative has reached the channel yet, if at all.

PRO: Channel conflictCON: Despite their own bravado, Sun’s direct professional service team was kept in check in size and resourcing. IBM is the opposite end of the spectrum here. We’ll see how Sun partners navigate engagement models with (or around) IBM Global Services.

Although there’s blood in the water right now, the competitive attack from IBM will likely need at least another 18-24 months to show big results. It’s one of those "be careful what you ask for, you might get it" adages. Smart Sun partners should certainly explore every incentive and resource available to diversify their business beyond Sun hardware and software. And, partners looking forward to a long-term product and services practice around IBM will likely not be disappointed. But for those looking for a supplier relationship to address all their concerns with Sun and Oracle, free from complexity, confusion or conflict, IBM won’t necessarily present the perfect match.

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